Not every college student can afford the super deluxe student housing project with valet parking. (Not everyone at Butler University actually has a butler. Nor is everyone at Duke actual royalty.) Texla Housing Partners likes to fill the void with projects about 10 years old that need a little TLC, says CEO Roger Phillips. His MO is to acquire a property, make some improvements like new fitness equipment or upgrading Internet, furniture and carpet; the things that are tangible and used daily. That means something to them, he says.
He likes to add one or two deals to the portfolio annually and recently closed on projects in College Station (in a JV with Vermilion Development for an 828-bed project, pictured) and another in Lexington (676-bed project again with Vermilion). Their focus is on the Sunbelt/Southeast markets. Texas A&M has multiple new student housing projects open or in the works, but Roger says the university’s projected growth mitigates that supply coming. The University of Kentucky saw record freshman enrollment and he’s anticipating a similar scenario there. Texla doesn’t aim to be in the top tier 5% rents, but focuses on delivering on service and price with clean properties with expected amenities. He’d rather fight for 30% of the market at $500/bed, rather than the 5% who are paying $700 to $800/bed.
Roger (here, at a past Bisnow student housing event) says he approaches every market with a sense of caution, as oversupply has become more of a concern in the past 12 to 18 months. He looks at a college’s enrollment and growth expectations as well as what’s in the pipeline. If a market has a demand, but limited new supply, he takes an extra look to see why there’s no new construction. Texla has a project in Oxford (2000-era property with almost 492 beds) and another in the works (too early to disclose, but close to 1,000 beds).
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